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Bangkok Post
a day ago
- Business
- Bangkok Post
Thai banks start cutting interest rates
Thailand's top banks have started cutting lending rates, following the central bank's move on Wednesday to reduce the benchmark policy rate to a two-year low of 1.50% to support a weakening economy hit by US tariffs. Bangkok Bank, the country's largest lender by assets, led the move with a 25-basis-point cut to lending rates, matching the central bank's reduction. State-controlled Krungthai Bank and the Government Savings Bank also announced similar reductions. The reductions 'aim to help all customer groups quickly adapt to significant challenges arising from shifts in global production structures and supply chains, as well as intensifying competition in the near future', said Payong Srivanich, president of Krungthai Bank, who also heads the Thai Bankers Association. The central bank's Monetary Policy Committee voted unanimously on Wednesday to cut the benchmark rate to 1.50%, bringing the total reductions to 100 basis points since October. Thursday's moves mark the first time in the current easing cycle that Thai lenders have fully passed on a central bank rate cut, after previously passing through an average of just 43% of the past three reductions, according to BoT estimates. The Bank of Thailand has signalled its monetary policy will remain accommodative as it sees a slowdown in economic growth lasting into early 2026 due to the impact of a 19% US tariff on Thai goods, subdued domestic consumption and a decline in tourist arrivals. Incoming governor Vitai Ratanakorn, who will succeed Sethaput Suthiwartnarueput on Oct 1, lauded Bangkok Bank's move to lower lending costs. In a Facebook post, Mr Vitai said cheaper funds will help 'take care' of the business sector and the people. The former president of the Government Savings Bank is scheduled to chair his first rate meeting on Oct 8. The Pheu Thai-led government has long been urging banks to cut borrowing costs to help small businesses and households struggling to repay debt that soared during the pandemic. On Wednesday, Finance Minister Pichai Chunhavajira said the latest rate cut would help improve liquidity and support the Thai baht. Lower rates will also discourage banks from parking money with the central bank, he told reporters. But the lending rate cuts could further squeeze profit margins at major Thai banks, as net interest margins — already under pressure from weak loan growth — face additional strain, according to Sarah Jane Mahmud, a senior analyst at Bloomberg Intelligence. Bangkok Bank could be the most impacted, she said.
Bangkok Post
02-08-2025
- Politics
- Bangkok Post
Border crisis blues
Simmering tensions along the Thai-Cambodian border have intensified the political storm in Thailand, with analysts saying the Pheu Thai-led government is rapidly losing public trust amid accusations of weak leadership, poor crisis communication, and possible secret dealings. Public confidence in Pheu Thai had already declined, as indicated by the second quarter NIDA Poll, conducted on June 19-25. Prime Minister Paetongtarn Shinawatra, suspended from duty pending a Constitutional Court ruling over a leaked audio clip involving her conversation with Cambodian Senate President Hun Sen, won an approval rating of just 9.20%, down from 30.90% in the first quarter. The sharp drop came even before the recent border clashes erupted. Analysts believe the escalating violence and the government's sluggish response are likely to further shrink public support. Absence of trust Olarn Thinbangtieo, deputy dean of Burapha University's faculty of political science and law, said the Paetongtarn administration has struggled from the start to dispel public doubts about possible hidden agendas due to the Shinawatra family's close ties with Cambodian strongman Hun Sen. Distrust began to grow following a meeting between her father, former prime minister Thaksin Shinawatra, and Hun Sen at Thaksin's home in Bangkok after he was granted parole in February last year. The situation further deteriorated after Ms Paetongtarn was heard criticising the commander of the Second Army Region and appearing overly willing to yield to Hun Sen's demands in the leaked conversation. Following the border clashes, the government has been criticised for failing to manage crisis communication. While the military has taken a proactive role, the government's slow response has fueled speculation about behind-the-scenes interests, said Mr Olarn. And rather than addressing the situation directly, the government has allowed Malaysian Prime Minister Anwar Ibrahim, in his capacity as Asean chair, to mediate the conflict, with the United States also playing a part in the process. Although Malaysia's intervention is in line with Asean's approach, Thaksin serves as an adviser to Mr Anwar, and with his complex relationship with Hun Sen, many believe Thaksin may have asked Anwar to step in, he said. The circumstances have led many to wonder if the border conflict is being used as a pretext to enable deal-making or interest sharing in the overlapping claims area (OCA) between the countries, an area believed to have rich fossil fuel deposits. "The government has done nothing. Such inaction has only fueled public suspicion. Lives are at stake, so people are beginning to question whether there are hidden interests behind the scenes, particularly involving the Shinawatra and Hun families," he said. Mr Olarn said Cambodia has outperformed Thailand on many fronts in the conflict, such as international diplomacy, and unity between the government and its military. Nonetheless, the conservative camp sees Thaksin and his networks as necessary, so they are likely to maintain their status for now. However, Mr Olarn expressed doubts about Pheu Thai's chances of winning the next elections though Ms Paetongtarn is likely to hold on to the prime minister post as long as there is no court order to remove her from office. Public backlash Prathuang Muang-on, a lecturer at Ubon Ratchathani University's political science faculty, said the border conflict has eroded confidence in the ruling party, pointing to open hostility toward Thaksin during his recent visit to Ubon Ratchathani to support civilians displaced by the clashes. While the lower Northeast is traditionally not a stronghold for Pheu Thai's constituency MPs, the party has performed well in the party-list system. But the border dispute is thought to cut into the party's support in Ubon Ratchathani and Si Sa Ket by at least 5%. Also, although Pheu Thai has a broad support base in the Northeast, the fallout from the border dispute has sparked criticism among northeastern voters, Mr Prathuang said. The leaked clip was the first factor, followed by the government's slow response in addressing the crisis and helping those affected. Combined with the military's proactive role in the conflict, the government is viewed negatively, he said. Even if Ms Paetongtarn steps down and Pheu Thai's prime ministerial candidate Chaikasem Nitisiri takes over, it is unlikely to make much of a difference. However, does not expect a dramatic change in Pheu Thai's overall seat count in the next elections, though the landslide victories in the constituency system which the party once enjoyed are now a thing of the past. It would also have a tough time winning party-list support. Court ruling is key Korkaew Pikulthong, a red-shirt leader and a Pheu Thai list-MP, admitted the government's image has suffered from poor communication but insisted the border tensions are unlikely to change the political landscape. "What really matters is the court's decision. If the court rules against Ms Paetongtarn, she is out, and the fallout could be immense. The party's third candidate, Mr Chaikasem, may not have much backing from the party MPs or coalition partners," he said. It was too soon to say whether the political turbulence marks a turning point even if Ms Paetongtarn is removed from office because the court decision would be based on evidence rather than an attempt to eliminate a political family. "It can't be concluded it is the end of Shinawatra family. It is one-time incident to be judged on its own merits. But if the prime minister is removed from office, it will shake public confidence," he said. He said that Thaksin still holds political clout and the former prime minister commands more public confidence than many other political figures. Asked whether the Shinawatra family's clout is fading, he said Pheu Thai has been on a downward trend since the last general election. He said stimulus schemes were not effective in reviving the economy because cash handouts were often not spent as intended. A digital wallet would allow more control and ensure the money is spent effectively, he added. Still, he said the focus now is on delivering results, especially on key economic initiatives and passing the budget bill which is not expected to face any hurdles. In the event the government is unable to continue, a House dissolution is the most likely path forward. While some analysts predict Pheu Thai could fall below 100 seats in the next elections, he said: "Let's not underestimate the party too soon." Full-blown crisis of faith Bhumjaithai Party deputy leader Siripong Angkasakulkiat said the government faces a deep lack of public confidence, and its actions, whether from Thaksin, Ms Paetongtarn or acting prime minister Phumtham Wechayachai, have done little to inspire confidence. He criticised the government's handling of the border conflict, saying it should have relied on formal, state-level diplomacy. Instead, the government's tone comes across as personal, which has stirred suspicions. Mr Siripong also pointed to a lack of coordination and strategic direction within the administration. Many officials appear hesitant to act if there are no clear instructions, possibly out of fear of making missteps or displeasing their superiors or the public. "They do what only they are told. When there are no clear orders, nothing gets done. The government communication has been one-sided, focusing only on positive news without offering a clear, comprehensive plan to address the crisis," he said. Mr Siripong said the Pheu Thai-led government has a chance to prove itself, but missed it. "What they now face is a full-blown crisis of public faith," he said. Asked whether the Shinawatra family still carries weight, he said Thailand risks heading down a path similar to Cambodia, where political power remains in a single family. On the government's fate, he said the ruling party's focus is on short-term populist projects, such as the 20-baht electric train fare policy, with which it hopes to score quick wins ahead of elections. However, it is unclear if this will work. Pheu Thai could slip to the third place and win fewer than 100 seats in the next polls. "The government's future hinges on two key events: the court's ruling on Ms Paetongtarn's case and the outcome of the next censure debate. Based on the current public mood, it's hard to see this administration lasting much longer," he said.
Bangkok Post
28-07-2025
- Politics
- Bangkok Post
Time for this unnecessary war to end
It was a war everyone saw coming. After weeks of provocations and inflammatory rhetoric across the Thai–Cambodian border since May 28, the failure to de-escalate tensions finally erupted into deadly border skirmishes. Despite diplomatic efforts, no fruitful progress was made. As diplomacy faltered, ultra-nationalism made inroads, and rhetoric gave way to border clashes beginning last Thursday. The militaries on both sides now face mounting public pressure to defend their respective motherlands. In such a climate, a tit-for-tat escalation was almost inevitable. Talk of a ceasefire has yet to be translated into meaningful action. Thailand has agreed in principle, while Cambodia wants an immediate ceasefire, but no cessation of hostilities has occurred on the ground. Beyond the battlefields, domestic challenges in both countries have further fueled the conflict. In Thailand, the Pheu Thai-led coalition is struggling to maintain stability. Prime Minister Paetongtarn Shinawatra's political future now hangs in the balance after the Constitutional Court suspended her from office following a leaked, deeply damaging phone conversation with Cambodian Senate President Hun Sen. Once seen as a diplomatic asset -- thanks to her father Thaksin's long-standing ties with Hun Sen -- that connection has turned into a liability for the Shinawatra family. Their private feuds have become a public liability that severs diplomatic channels. In Cambodia, Hun Sen, though no longer prime minister, remains the country's power centre as he backs his son, Prime Minister Hun Manet, much to the chagrin of the ruling Cambodia People's Party's old and young apparatus. But the economic headwinds are more intense. Cambodia faces a potential 36% tariff hike from the United States, reduced from an earlier proposal of 49%. If Phnom Penh fails to secure a deal with the Trump administration by Friday, Hun Sen's legacy and Cambodia's growth prospects will be thrown into jeopardy. Against this backdrop, President Donald Trump has phoned both Thai and Cambodian leaders, urging them to hold ceasefire talks; otherwise, ongoing trade negotiations with the US will be halted. Once again, Mr Trump is weaponising tariffs as diplomatic leverage, with his team hoping the ultimatum will bring an end to the fighting. Since Cambodia's independence in 1953, Thailand has always regarded it as a close neighbour and an integral part of the Asean family. Thailand also played an important role in the peace process, nation-building and development through the 1991 Paris Peace Agreements and Cambodia's membership in Asean in 1999. At the special private meeting of the United Nations Security Council (UNSC) last week, the two countries brought their cases for all to see. For many council members, the speed and ferocity of the conflict -- given the relatively stable ties that followed the 2011 border clashes -- came as a big surprise. That period, particularly during the Prayut Chan-o-cha government, had been marked by cordial relations and personal rapport between leaders. However, relations gradually turned sour after Pheu Thai returned to power in 2023. Initially, optimism prevailed. When Ms Paetongtarn assumed office in September 2024, it signalled a fresh chapter with Cambodia's new premier, Hun Manet. Both leaders, bolstered by the backing of domineering influential fathers, promised deeper ties. That hope vanished after their fallout over the leaked private phone call between Hun Sen and Ms Paetongtarn. Tensions rose further after Thaksin proposed cuts to the defence budget, arguing the military had consumed too much public funding. Then came Thursday. According to Thai officials, Cambodian artillery shells struck civilian areas in Thailand's Surin province early that morning, hitting community areas and a hospital. The attacks killed more than a dozen villagers. The Thai military quickly retaliated with precision airstrikes on military targets by deploying F-16s to target military installations across the border. Thailand's response was formally outlined by Ambassador Cherdchai Chaivaivid, its Permanent Representative to the UN, during the UNSC briefing. He emphasised that Thailand was the victim of Cambodia's "indiscriminate attacks" on civilians, and that its retaliation was defensive, proportionate, and limited to military targets. In a related move, Thailand submitted letters to the United Nations Children's Fund and the UN High Commissioner for Human Rights, urging them to condemn Cambodia's strikes that endangered civilian lives, especially children. As Thai armed forces mobilise further, nationalist sentiment is intensifying. With over 130,000 civilians evacuated and artillery still falling on Surin and nearby provinces, a real ceasefire appears remote. Given the current public sentiment, the Thai military is unlikely to agree to any truce unless Cambodia halts all attacks on civilians and commits to negotiations in good faith. At the global level, Cambodia utilised its diplomatic adroit skills to internationalise the conflict further. Phnom Penh made a pre-emptive request for a UN Security Council meeting within hours after launching its dawn assault. It was a calculated attempt to shift the blame to Thailand. Finally, the UNSC meeting was held and concluded without a resolution. Overall, the council members expressed concerns, but some of them deemed the armed clashes as not yet a threat to international peace and security. As such, the issue was neither placed on the UNSC agenda nor referred to the International Court of Justice for further action, as Cambodia had demanded. While Thailand has consistently said it prefers bilateral resolution, it has not completely rejected third-party facilitation. Asean Chair Malaysia, under Prime Minister Anwar Ibrahim, has offered a potential path forward. Mr Anwar, seen as a neutral and principled actor, is well-positioned to serve as an honest broker who can create an environment in which Asean members can begin to mend ties. As of this writing, Thai and Cambodian delegations were set to meet in Kuala Lumpur on Monday to negotiate a ceasefire under the Asean chair, as host and observer. It is hoped that the two sides will agree to return to the conditions that existed before May 2025. The ceasefire must also cover the protection of civilians, cultural heritage and humanitarian access. Most importantly, they have to adhere to international humanitarian law. Another critical element is preventing and stopping information warfare against one another. The information operation, both offline and online, has already sown the seeds of mutual hostile feelings for generations to come. In the longer term, the revival of existing bilateral mechanisms will be essential. These frameworks, which have been used in the past to ease tensions and foster cooperation, can help restore trust. But with blood already spilt, reconciliation will not be quick. Ending this unnecessary war must now be at the top of the agenda. Both sides must ensure that such unwarranted armed conflict does not recur for the sake of the well-being of Thais and Cambodians.
The Star
25-07-2025
- Politics
- The Star
Cambodia clash heaps pressure on embattled Thai PM, boosts army
BANGKOK: Thailand's military conflict with Cambodia is inflaming nationalist tensions at home and threatening embattled leader Paetongtarn Shinawatra (pic), who had already been suspended as prime minister for her handling of the border dispute. Hours after Thai fighter jets struck Cambodian military positions and Phnom Penh hit civilian areas in the deadliest clashes in over a decade, Thai nationalist groups announced plans for an anti-government rally in Bangkok on Sunday (July 27). Tweets supporting the Thai army and air force are trending on X and Facebook in Thailand. Paetongtarn is already in a precarious position over her handling of the border issue, thanks to the leak of a June 15 call with former Cambodian leader Hun Sen in which the 38-year-old was sympathetic to her neighbour and critical of the powerful Thai military. That led to complaints to the Constitutional Court, which suspended her as prime minister. "Heightened military tensions reaffirm expectations that the Constitutional Court will likely rule that Paetongtarn be removed from office,' said Peter Mumford, South-East Asia Practice Head at Eurasia Group. "If snap elections take place in Thailand later this year or next year, conservative parties will hope to ride a wave of nationalist sentiment, with populist Pheu Thai on the backfoot.' Thailand's Pheu Thai-led coalition has been on the brink after the defection of a key party last month left it with a slender majority. Paetongtarn herself only took power after a court removed her predecessor, while her father, Thaksin Shinawatra, was ousted in a 2006 coup. "The continuation of this government has gravely undermined and endangered the country's security in all dimensions - including national honour, national interests, and public assets - and has resulted in a complete loss of trust and public order,' protest leader Pichit Chaimongkol said at a briefing on Thursday. Thai-Cambodian tensions have been running high since a May exchange of fire that killed a Cambodian soldier, and the countries have disputed their roughly 800 kilometre border for decades. The Thai army asked people to stay away from border areas on Friday, saying fighting continues. In 2003, the Thai embassy in Phnom Penh was destroyed in riots by Cambodians angered by a Thai celebrity who suggested that the iconic Angkor Wat temple complex was Thai, while clashes from 2008 to 2011 killed more than two dozen people on both sides of the border. Much of the argument stems from different maps based on the text of Franco-Siamese treaties of the early 1900s that laid out boundaries between Thailand and Cambodia, which was then part of French Indochina. The latest crisis comes at a challenging time for both countries, with the US threatening to impose stiff tariffs from Aug. 1. While neighbouring Indonesia, the Philippines and Vietnam have secured trade agreements with the Trump administration, export-dependent Thailand does not yet have a deal. Thursday's fighting killed at least 14 people and injured dozens in Thailand, which launched airstrikes against at least three Cambodian military bases. The Thai army has been allowed a relatively free hand in conducting its operations. The government's actions on the Cambodia issue risk lending more legitimacy to the military and boosting its popularity in Thai politics, said Titipol Phakdeewanich, a political science lecturer at Ubon Ratchathani University. "Pheu Thai's inability to lead the government effectively is leading to popularity for the military,' Titipol said. Thai politics has been dominated by a longstanding power struggle between populist, pro-democracy forces and a pro-military establishment made up of wealthy elites and royalist bureaucrats. Since the end of absolute monarchy in 1932, the nation has seen roughly a dozen coups and about 20 constitutions. At least four governments backed by the influential Shinawatra clan have been dismissed either through coups or court orders. Paetongtarn and Thaksin, who's the de facto leader of Pheu Thai, have both expressed support for the Thai military. Still, during his long, post-coup exile from Thailand, Thaksin was named an economic adviser to then-Cambodian prime minister Hun Sen, angering the military-backed authorities in Bangkok at the time. Their relationship has since deteriorated, with Thaksin taking to X to criticise the former Cambodian leader, whose son is the current prime minister. While countries have offered to mediate in the conflict, "we probably need to let the Thai military do its job and teach Hun Sen a lesson about his cunning ways first,' Thaksin said. "I am not surprised by Thaksin's attitude toward me,' Hun Sen tweeted in turn, criticising his "warlike' tone and accusing him of multiple betrayals. He also mentioned a mass killing of Thai Muslims that occurred during Thaksin's premiership in 2004, which was widely condemned by human rights groups. Paetongtarn, who attends cabinet as the culture minister, is facing a Thai Constitutional Court probe of alleged ethical violations in her handling of the border dispute. She has until July 31 to submit her defence. "The border skirmish will strengthen conservatives and there will be speculation that, alongside domestic political developments, it could trigger a military coup - though this does not currently seem on the cards,' Mumford said. "The odds of a coup will rise if the security and political environment worsens further.' - Bloomberg ALSO READ:
Straits Times
25-07-2025
- Politics
- Straits Times
Cambodia border clash heaps pressure on embattled Thai PM
Find out what's new on ST website and app. Ms Paetongtarn Shinawatra was suspended as Thailand's Prime Minister following a leaked phone call between her and former Cambodian leader Hun Sen. Follow our live coverage here. Thailand's military conflict with Cambodia is inflaming nationalist tensions at home and threatening embattled leader Paetongtarn Shinawatra, who had already been suspended as prime minister for her handling of the border dispute. Hours after Thai fighter jets struck Cambodian military positions and Phnom Penh hit civilian areas in the deadliest clashes in over a decade, Thai nationalist groups announced plans for an anti-government rally in Bangkok on July 27. Tweets supporting the Thai army and air force are trending on X and Facebook in Thailand. Ms Paetongtarn is already in a precarious position over her handling of the border issue, thanks to the leak of a June 15 call with former Cambodian leader Hun Sen in which the 38-year-old was sympathetic to her neighbour and critical of the powerful Thai military. That led to complaints to the Constitutional Court, which suspended her as prime minister. 'Heightened military tensions reaffirm expectations that the Constitutional Court will likely rule that Paetongtarn be removed from office,' said Peter Mumford, Southeast Asia Practice Head at Eurasia Group. 'If snap elections take place in Thailand later this year or next year, conservative parties will hope to ride a wave of nationalist sentiment, with populist Pheu Thai on the backfoot,' he added. Thailand's Pheu Thai-led coalition has been on the brink after the defection of a key party last month left it with a slender majority. Top stories Swipe. Select. Stay informed. Singapore HDB resale price growth moderates in Q2, more flats sold Singapore Etomidate found in blood samples of 2 people involved in fatal Punggol Road accident in May: HSA Asia Live: Thailand-Cambodia border clashes continue for second day Business GIC posts 3.8% annualised return over 20 years despite economic uncertainties Business GIC's focus on long-term value aims to avoid permanent loss amid intensifying economic changes Sport 'We can match Malaysia or do even better', say Singapore's divers Opinion No idle punt: Why Singapore called out cyber saboteur UNC3886 by name Singapore Prison officer accused of taking bribes to smuggle nude photos, prescription drugs to inmate Ms Paetongtarn herself only took power after a court removed her predecessor, while her father, Thaksin Shinawatra, was ousted in a 2006 coup. 'The continuation of this government has gravely undermined and endangered the country's security in all dimensions – including national honour, national interests, and public assets – and has resulted in a complete loss of trust and public order,' protest leader Pichit Chaimongkol said at a briefing on July 24. Thai-Cambodian tensions have been running high since a May exchange of fire that killed a Cambodian soldier , and the countries have disputed their roughly 800km border for decades. The Thai army on July 25 asked people to stay away from border areas, saying fighting continues. In 2003, the Thai embassy in Phnom Penh was destroyed in riots by Cambodians angered by a Thai celebrity who suggested that the iconic Angkor Wat temple complex was Thai, while clashes from 2008 to 2011 killed more than two dozen people on both sides of the border. Much of the argument stems from different maps based on the text of Franco-Siamese treaties of the early 1900s that laid out boundaries between Thailand and Cambodia, which was then part of French Indochina. The latest crisis comes at a challenging time for both countries, with the US threatening to impose stiff tariffs from Aug 1. While neighbouring Indonesia, the Philippines and Vietnam have secured trade agreements with the Trump administration, export-dependent Thailand does not yet have a deal. Thursday's fighting killed at least 14 people and injured dozens in Thailand, which launched airstrikes against at least three Cambodian military bases. The Thai army has been allowed a relatively free hand in conducting its operations. The government's actions on the Cambodia issue risk lending more legitimacy to the military and boosting its popularity in Thai politics, said Titipol Phakdeewanich, a political science lecturer at Ubon Ratchathani University. 'Pheu Thai's inability to lead the government effectively is leading to popularity for the military,' Dr Titipol said. Thai politics has been dominated by a longstanding power struggle between populist, pro-democracy forces and a pro-military establishment made up of wealthy elites and royalist bureaucrats. Since the end of absolute monarchy in 1932, the nation has seen roughly a dozen coups and about 20 constitutions. At least four governments backed by the influential Shinawatra clan have been dismissed either through coups or court orders. Ms Paetongtarn and Mr Thaksin, who's the de facto leader of Pheu Thai, have both expressed support for the Thai military. Still, during his long, post-coup exile from Thailand, Mr Thaksin was named an economic adviser to then-Cambodian prime minister Hun Sen, angering the military-backed authorities in Bangkok at the time. Their relationship has since deteriorated, with Thaksin taking to X to criticise the former Cambodian leader, whose son is the current prime minister. While countries have offered to mediate in the conflict, 'we probably need to let the Thai military do its job and teach Hun Sen a lesson about his cunning ways first,' Mr Thaksin said. 'I am not surprised by Thaksin's attitude toward me,' Mr Hun Sen tweeted in turn, criticizing his 'warlike' tone and accusing him of multiple betrayals. He also mentioned a mass killing of Thai Muslims that occurred during Mr Thaksin's premiership in 2004, which was widely condemned by human rights groups. Ms Paetongtarn, who attends cabinet as the culture minister, is facing a Thai Constitutional Court probe of alleged ethical violations in her handling of the border dispute. She has until July 31 to submit her defense. 'The border skirmish will strengthen conservatives and there will be speculation that, alongside domestic political developments, it could trigger a military coup - though this does not currently seem on the cards,' Mr Mumford said. 'The odds of a coup will rise if the security and political environment worsens further.' BLOOMBERG
